Skip to content

We want to clarify that IG International does not have an official Line account at this time. We have not established any official presence on Line messaging platform. Therefore, any accounts claiming to represent IG International on Line are unauthorized and should be considered as fake.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

EUR/GBP bottomed out while EUR/USD and USD/JPY await FOMC

USD/JPY levelled out, while the euro is struggling to make headway against both the dollar and the pound.

EUR Source: Bloomberg

EUR/USD continues to weigh on channel support line, awaiting FOMC

EUR/USD keeps testing the two-month channel support line at $1.1292 which may still be slipped through ahead of key policy decisions from the Federal Open Market Committee (FOMC) tomorrow.

Together with the late December and early January lows at $1.1274 to $1.1272 the channel support line has held since late December. A fall through this support zone would put the mid-December low at $1.1222 as well as the November trough at $1.1186 on the map.

The downtrend remains firmly entrenched while the currency pair stays below the 16 January high at $1.1369 and, more importantly, the late November and December highs at $1.1383 to $1.1387.

EUR/USD chart Source: IT-Finance.com
EUR/USD chart Source: IT-Finance.com

EUR/GBP has formed a bottom and is likely to rise further still

Now that the November low and last week’s high at £0.8379 to £0.8381 have been exceeded, EUR/GBP is deemed to have formed a bottom at its year-to-date low at £0.8305. It was made right between the £0.8313 to £0.8277 December 2016, April 2017, December 2019 and February 2020 lows which represent key long-term support.

Given yesterday’s advance above the £0.8379 to £0.8381 resistance area and the brief rise above the early January £0.8419 high, the medium-term forecast has been neutralised with further short-term upside pressure remaining in the pipeline. The 55-day simple moving average (SMA) and mid-December low at £0.8436 to £0.8454 are now being eyed.

Slips, because of inverse polarity, should find support around previous resistance, namely in the £0.8381 to £0.8379 area. While the cross stays above yesterday’s low at £0.8351, further short-term upside is expected to be observed.

EUR/GBP chart Source: IT-Finance.com
EUR/GBP chart Source: IT-Finance.com

USD/JPY is to meander further above its ¥113.48 early January low ahead of FOMC

Yesterday USD/JPY probed but then bounced off its early January low at ¥113.48 with further short-term range trading above it likely to be seen ahead of tomorrow’s much anticipated US FOMC meeting.

A drop below yesterday’s ¥113.47 low would lead to the mid-December low at ¥113.14 being targeted, together with the late November low at ¥112.53.

Minor resistance continues to be seen along the 55-day SMA at ¥114.28 as well as along the one-month downtrend line at ¥114.38. The next higher ¥115.06 mid-January high and the November peak at ¥115.52 would need to be exceeded for the still bearish outlook to be invalidated.

USD/JPY chart Source: IT-Finance.com
USD/JPY chart Source: IT-Finance.com

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Find out more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.